15/07/2008

Calls for €1 Cut To Minimum Wage

The Small Firms Association (SFA) has called for a €1 cut in the minimum wage in a bid to curb rising dole queues.

According to SFA Director Patricia Callan, Ireland had "lost the plot" in terms of having a competitive labour market.

The SFA wants to reduce the minimum wage to €7.65 an hour. The minimum wage in Ireland is currently €8.65 which at 39 hours a week amounts to €1,462 a month.

Ms Callen said: "Minimum wage comparisons are symptomatic of what Ireland has become - a high-cost, uncompetitive economy.

"If we continue in this way there is no future in Ireland for labour-intensive industries."

Ireland's minimum wage is the second highest in Europe after Luxembourg, it is also more than twice that of the US, and 19% higher than the UK.

Ms Callan called on the Government to decrease the statutory minimum wage in order to regain lost competitiveness of Irish small businesses vis-a-vis their international competitors and to boost job prospects amongst younger people.

In the first half of this year, there were over 16,500 redundancies in Irish companies.

The director claimed that the Irish minimum wage level was contributing to jobs being lost to lower cost economies, and to a 42% surge in youth unemployment.

However SIPTU described the proposal as nonsensical grandstanding which would punish the poor.

SIPTU President Jack O'Connor said: "Apart from the immorality of suggesting our problems can be resolved by crucifying those earning the minimum wage, it would do nothing to address the problems we face.

"These arise from spiralling, largely imported inflation and collapsing business confidence.

"Not only would cutting the minimum wage contribute nothing to resolving these problems but it could exacerbate them by depressing the spending power of consumers still further and sending out a message that things are so desperate that we are prepared to single out the most vulnerable members of the workforce for punitive treatment."

The proposal is expected to be discussed at the next round of national paytalks.

(GK/JM)

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